S.A. Builders Ltd. v. CIT

288 ITR 1Supreme Court of India2007#26 most cited

What is S.A. Builders Ltd. v. CIT authority for?

Interest paid on borrowed funds cannot be disallowed merely because the assessee made interest-free advances, provided those advances were made for business purposes and commercial expediency. The Revenue cannot dictate a businessman's commercial decisions, but the assessee bears the onus to prove the business expediency.

1,484

judgments rely on this decision, according to BharatTax’s citation analysis of 367,182 Indian tax judgments — from 2008 to 2026.

Also referred to as

S.A. Builders Ltd. v. CIT · 288 ITR 1 · Section 36(1)(iii) · commercial expediency · business expediency · interest-free advances · disallowance of interest · onus to prove business purpose · borrowed funds · Revenue interference

Also reported as

158 Taxmann 74158 Taxmann.com 74

Sections most often in play

Section 143(3)Section 36(1)(iii)Section 14ASection 1961Section 148Section 147Section 40(a)(ia)Section 142(1)
Read the full judgment

Issues it is cited on

commercial expediencyinterest free advancessection 36(1)(iii)business expediencydisallowance of interest expendituresection 36(1)section 36revenue expendituresection 37(1)section 37capital expendituresection 14a

Judgments citing S.A. Builders Ltd. v. CIT

ACIT, Circle-1, Noida vs. Jaiprakash Associates Limited, Noida

In the result, appeals of the Revenue

ITA 947/DEL/2022[2012-13]Status: DisposedITAT Delhi07 Feb 2023AY 2012-13

Bench: Shri Anil Chaturvedi & Shri Anubhav Sharma

For Appellant: Shri Ashwani Kumar GargFor Respondent: Smt Abha Rani Singh
Section 143(3)

…relevant finding in para 12 and 13 which read as under: "12. We have heard learned representatives of both the parties at length Shri R. C. Sharma, CIT, D. R. relied on the decision of Hon'ble Supreme Court in the case of S. A. Builders Limited vs. CIT (2007) 288 ITR 1 (SC). On the other had Shri Kanchan Kaushal, Learned Counsel for the 18 ITA Nos. 945 to 947/Del./2022 M/s. Jaiprakash Associates Limited assessee submitted that the decision of Hon'ble Supreme Court in the case of S. A. Builders (supra) is not applicable to the facts of the present case. He further submitted that all the balance that have been cons…

ACIT, Circle-1, Noida vs. Jaiprakash Associates Limited, Noida

In the result, appeals of the Revenue

ITA 946/DEL/2022[2011-12]Status: DisposedITAT Delhi07 Feb 2023AY 2011-12

Bench: Shri Anil Chaturvedi & Shri Anubhav Sharma

For Appellant: Shri Ashwani Kumar GargFor Respondent: Smt Abha Rani Singh
Section 143(3)

…relevant finding in para 12 and 13 which read as under: "12. We have heard learned representatives of both the parties at length Shri R. C. Sharma, CIT, D. R. relied on the decision of Hon'ble Supreme Court in the case of S. A. Builders Limited vs. CIT (2007) 288 ITR 1 (SC). On the other had Shri Kanchan Kaushal, Learned Counsel for the 18 ITA Nos. 945 to 947/Del./2022 M/s. Jaiprakash Associates Limited assessee submitted that the decision of Hon'ble Supreme Court in the case of S. A. Builders (supra) is not applicable to the facts of the present case. He further submitted that all the balance that have been cons…

ACIT, Circle-1, Noida vs. Jaiprakash Associates Limted, Noida

In the result, appeals of the Revenue

ITA 945/DEL/2022[2010-11]Status: DisposedITAT Delhi07 Feb 2023AY 2010-11

Bench: Shri Anil Chaturvedi & Shri Anubhav Sharma

For Appellant: Shri Ashwani Kumar GargFor Respondent: Smt Abha Rani Singh
Section 143(3)

…relevant finding in para 12 and 13 which read as under: "12. We have heard learned representatives of both the parties at length Shri R. C. Sharma, CIT, D. R. relied on the decision of Hon'ble Supreme Court in the case of S. A. Builders Limited vs. CIT (2007) 288 ITR 1 (SC). On the other had Shri Kanchan Kaushal, Learned Counsel for the 18 ITA Nos. 945 to 947/Del./2022 M/s. Jaiprakash Associates Limited assessee submitted that the decision of Hon'ble Supreme Court in the case of S. A. Builders (supra) is not applicable to the facts of the present case. He further submitted that all the balance that have been cons…

DCIT 3 (1), Bhopal vs. M/S Narmada Switchgear P Ltd, Bhopal

Accordingly, this ground is also dismissed

ITA 307/IND/2020[2013-14]Status: DisposedITAT Indore03 Feb 2023AY 2013-14

Bench: Shri Chandra Mohan Garg & Shri B.M. Biyaniassessment Year: 2013-14 Dcit-3(1) M/S Narmada Switchgear Bhopal Pvt. Ltd., बनाम/ Plot No.3, Industrial Estate, Govindpura Vs. Bhopal (Appellant / Assessee) (Respondent / Revenue) Pan: Aabcn0635N Assessee By Shri S.S. Deshpande, Ca Revenue By Shri P.K. Mishra, Cit-Dr Date Of Hearing 09.11.2022 Date Of Pronouncement 03.02.2023

Section 143(2)Section 143(3)

…e of filing of TDS return. It is submitted that all the expenditure has been incurred in commercial expediency. The appellant has placed reliance upon the decision of Hon'ble Apex Courts in the case of Hero Cycle Pvt. Ltd. 63 Taxmann.com 308 and S.A. Builders 288 ITR 1. In view of the above submissions the appellant submitted that the addition made may be deleted. Page 17 of 27 M/s Narmada Switchgear Pvt. ltd Assessment year 2013-14 5.2 I have considered the facts of the case, findings of the Ld. AO. and submission of the appellant. The Ld. AO has disallowed 20% of Rs. 4,11,11,257/- being sub-contract expense.…

Global Consultants & Designers Pvt. Ltd., New Delhi vs. ITO Ward 11(4), New Delhi

The appeal is allowed

ITA 1424/DEL/2019[2015-16]Status: DisposedITAT Delhi25 Jan 2023AY 2015-16

Bench: Sh. Shamim Yahya & Sh. Anubhav Sharmaita No.1424/Del/2019, A.Y. 2015-16

Section 133(6)Section 143(2)Section 143(3)

…Services Ltd.: ITA 107/2012 (Del. HC) Re:Commercial or business expediency of incurring any expenditure is to be seen from the assessee’s point of view and the Revenue cannot justifiably put itself in the arm-chair of the businessman 9. SA Builders v. CIT : 288 ITR 1 (SC) 10. Hero Cycles Limited v. CIT (SC) : 379 ITR 347 (SC) 11. J.K. Woollen Manufacturers v. CIT : 72 ITR 612 (SC) Re: Tribunal can give finding or direction in relation to other assessment year 12. JCIT v. Mukund Ltd. : 291 ITR 249 (AT) (Mum) 13. Perfect Equipments v. DCIT : 85 ITD 50 (Ahd.) 14. MMTC Limited v. ACIT : ITA No. 5147, 5166/Del/…

Akkavila Sajeenan Aggregates, Kollam vs. The ACIT Central Circle, Kollam

In the result, the appeals by the assessee are allowed

ITA 694/COCH/2022[2019-2020]Status: DisposedITAT Cochin20 Jan 2023AY 2019-2020

Bench: Smt. Beena Pillai & Ms. Padmavathy S.

For Appellant: Shri Surendranath Rao, CAFor Respondent: Smt. J M Jamuna Devi, Sr. AR
Section 133ASection 30Section 36(1)(iii)Section 37Section 44A

…xcess of advances made and therefore it cannot be said that there is a diversion of interest bearing fund. In this regard, the assessee relied on the decision in the case of Hero Cycles P. Ltd. [2016]236 Taxman 447 (SC) and in the case of S.A. Builders [2007] 288 ITR 1 (SC). The CIT(A) did not accept the submissions of the assessee that the advance was made out of partners capital since there was a direct payment from the OD account during the year. The CIT(A) also noted that there was no other transaction other than the advance for the year ended 31.3.2018 and 31.3.2019 and therefore the assessee failed to prove…

Akkavila Sajeenan Aggregates, Kollam vs. The ACIT Central Circle, Kollam

In the result, the appeals by the assessee are allowed

ITA 693/COCH/2022[2018-2019]Status: DisposedITAT Cochin20 Jan 2023AY 2018-2019

Bench: Smt. Beena Pillai & Ms. Padmavathy S.

For Appellant: Shri Surendranath Rao, CAFor Respondent: Smt. J M Jamuna Devi, Sr. AR
Section 133ASection 30Section 36(1)(iii)Section 37Section 44A

…xcess of advances made and therefore it cannot be said that there is a diversion of interest bearing fund. In this regard, the assessee relied on the decision in the case of Hero Cycles P. Ltd. [2016]236 Taxman 447 (SC) and in the case of S.A. Builders [2007] 288 ITR 1 (SC). The CIT(A) did not accept the submissions of the assessee that the advance was made out of partners capital since there was a direct payment from the OD account during the year. The CIT(A) also noted that there was no other transaction other than the advance for the year ended 31.3.2018 and 31.3.2019 and therefore the assessee failed to prove…

Punyah Building Materials Pvt. Ltd., Faridabad vs. ITO Ward 2(1), Faridabad

In the result, the appeal of the assessee is allowed

ITA 6171/DEL/2019[2015-16]Status: DisposedITAT Delhi19 Jan 2023AY 2015-16

Bench: Dr. B. R. R. Kumar & Sh. Yogesh Kumar U.S.

Section 143(1)Section 143(3)Section 251Section 56(2)(viib)Section 68

…ncome tax department or revenue official cannot guide a businessman in which manner risk has to be undertaken. Such an approach of the revenue has been judicially frowned by the Hon'ble Apex Court on several occasions, for instance in the case of SA Builders, 288 ITR 1 (SC) and CIT vs. Panipat Woollen and General Mills Company Ltd., 103 ITR 66 (SC). The Courts have held that Income Tax Department cannot sit in the armchair of businessman to decide what is profitable and how the business should be carried out. Commercial expediency has to be seen from the point of view of businessman. Here in this case if the inve…

Jwil Infra Ltd, New Delhi vs. DCIT Circle-13(2), New Delhi

ITA 7789/DEL/2019[2014-15]Status: DisposedITAT Delhi17 Jan 2023AY 2014-15

Bench: Sh. Anil Chaturvedi & Sh. Anubhav Sharma

Section 143(3)

…5 assessee did not have substantial capital and interest free fund available with it not only in the precedent year but also under the year under consideration which was not done. Relying judgment of Hon’ble Supreme Court of India in S.A.Builders vs. CIT(A) 288 ITR 1 (SC) it was submitted that when the assessee was bidder and subsidiary company was merely executing the project then that was sufficient explanation of the commercial expediency. Reliance was also placed on the following judgment : “1. S.A.Builders Vs. CIT 288 ITR 1 (SC) 2. Hero Cycles Pvt. Ltd. Vs. CIT 379 ITR 347 (SC) 3. CIT vs. Orissa Cement L…

Commissioner of Income Tax, Kol-III vs. M/S. Indian Aluminium Co. Ltd

In the result, the appeals filed by the revenue

ITA/96/2007HC Calcutta05 Jan 2023

Bench: : The Hon’Ble Justice T.S. Sivagnanam & The Hon’Ble Justice Hiranmay Bhattacharyya Date : 5Th January, 2023 Appearance : Mr. Om Narain Rai, Adv. …For The Revenue. Mr. J.P. Khaitan, Sr. Adv. Ms. Arati Agarwal, Adv. Ms. Rosy Banerjee, Adv. Mr. Binayak Gupta, Adv. …For The Assessee The Court : These Appeals Filed By The Revenue As Well As The Assessee Under Section 260A Of The Income Tax Act, 1961 (The Act) Are Directed Against The Order Dated October 20, 2006, Passed By The Income Tax Appellate Tribunal `A’ Bench, Kolkata (Tribunal) In Ita 1221/Kol./2006 & Ita 1045/Kol./2006, For The Assessment Year 2002-03. The Appeal Being Ita 173 Of 2007 Was Admitted On 7Th May, 2008 On The Following Substantial Questions Of Law :- “Whether On The Facts & In The Circumstances Of The Case The Learned Tribunal Was Justified In Law In Not Allowing :

Section 14ASection 260ASection 36(1)(iii)Section 43BSection 80I

…O-94 & 95 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE ITA/96/2007 COMMISSIONER OF INCOME TAX, KOLKATA-III, KOLKATA VS. INDIAN ALUMINIUM CO. LTD. ITA/173/2007 INDIAN ALUMINIUM CO. LTD. VS. COMMISSIONER OF INCOME TAX, KOLKATA-III, KOLKATA BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM And THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date : 5th January, 2023 Appearance : Mr. Om Narain Rai, Adv. …for the revenue. Mr. J.P. Khaitan, Sr. Adv. Ms. Arati Agarwal, Adv. Ms. Rosy Banerjee, Adv. Mr. Binayak Gupta, Adv. …for the assessee The Court : These appeals filed by the revenue as we…

Indian Aluminium Company Limited vs. Commissioner of Income Tax

In the result, the appeals filed by the revenue

ITA/173/2007HC Calcutta05 Jan 2023

Bench: : The Hon’Ble Justice T.S. Sivagnanam & The Hon’Ble Justice Hiranmay Bhattacharyya Date : 5Th January, 2023 Appearance : Mr. Om Narain Rai, Adv. …For The Revenue. Mr. J.P. Khaitan, Sr. Adv. Ms. Arati Agarwal, Adv. Ms. Rosy Banerjee, Adv. Mr. Binayak Gupta, Adv. …For The Assessee The Court : These Appeals Filed By The Revenue As Well As The Assessee Under Section 260A Of The Income Tax Act, 1961 (The Act) Are Directed Against The Order Dated October 20, 2006, Passed By The Income Tax Appellate Tribunal `A’ Bench, Kolkata (Tribunal) In Ita 1221/Kol./2006 & Ita 1045/Kol./2006, For The Assessment Year 2002-03. The Appeal Being Ita 173 Of 2007 Was Admitted On 7Th May, 2008 On The Following Substantial Questions Of Law :- “Whether On The Facts & In The Circumstances Of The Case The Learned Tribunal Was Justified In Law In Not Allowing :

Section 14ASection 260ASection 36(1)(iii)Section 43BSection 80I

…O-94 & 95 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE ITA/96/2007 COMMISSIONER OF INCOME TAX, KOLKATA-III, KOLKATA VS. INDIAN ALUMINIUM CO. LTD. ITA/173/2007 INDIAN ALUMINIUM CO. LTD. VS. COMMISSIONER OF INCOME TAX, KOLKATA-III, KOLKATA BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM And THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date : 5th January, 2023 Appearance : Mr. Om Narain Rai, Adv. …for the revenue. Mr. J.P. Khaitan, Sr. Adv. Ms. Arati Agarwal, Adv. Ms. Rosy Banerjee, Adv. Mr. Binayak Gupta, Adv. …for the assessee The Court : These appeals filed by the revenue as we…

Siddharth Developers, Mumbai vs. Asstt Commissioner of Income Tax CC-5(3), Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 707/MUM/2022[2017-18]Status: DisposedITAT Mumbai03 Jan 2023AY 2017-18

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Blesiddharth Developers V. Acit – Central Circle – 5(3) 205 Commerce House Room No. 1906, 19Th Floor 140 N.M. Road, Fort Air India Building Nariman Point, Mumbai – 400 021 Mumbai - 400023 Pan: Abffs4068J (Appellant) (Respondent) Assessee Represented By : Shri Nishit Gandhi Department Represented By : Shri Salil Mishra

Section 142(1)Section 143(2)

…dpur Motor Accessories Stores v/s CIT-(1974) 95 Taxman 664 (Patna), et. al.]. The AO also cannot decide the commercial expediency in incurring the said expenditure and it is the Assessee's prerogative to decide the same [Ref. S.A. Builders Ltd. v/s CIT-(2007) 288 ITR 1(SC), CIT v/s Escorts Heart Institute & Research Centre Ltd. -(2012) 349 ITR 8 (Delhi), et al.]. In fact it has been held that the AO can only decide if the expenditure is real and whether the same is incurred for the purpose of business and nothing more. In the present case no such dispute as regards the actual incurrence or the purpose of the expe…

DCIT, Chennai vs. Siva Ventures Ltd., Chennai

The appeal of the revenue stand partly allowed in terms of our above order

ITA 1417/CHNY/2016[2008-2009]Status: DisposedITAT Chennai23 Dec 2022AY 2008-2009

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am.

For Appellant: Shri B. Ramakrishnan (CA) – Ld. ARFor Respondent: Ms. Ann L.Kapthuama (CIT) –Ld. DR
Section 143(3)Section 14ASection 250(6)

…आयकर अपीलीय अिधकरण ‘डी’ "ायपीठ चे"ई म"। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI माननीय ,ी महावीर िसंह, उपा23 एवं माननीय ,ी मनोज कुमार अ8वाल ,लेखा सद; के सम3। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM. आयकरअपीलसं./ITA No.1390/Chny/2016 (िनधाDरणवषD / Assessment Year: 2008-09) M/s. Siva Industries and Holdings Ltd. DCIT (merged entity of M/s Siva Ventures Ltd.) Corporate Circle-3(2), बनाम/ New No.19, Old No.32, Chennai. Vs. Cathedral Garden Road, Nugambakkam Chennai – 600 034 "थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACS-8496-D (अपीलाथ"/Appellant) : (""थ…

Siva Industries and Holdings Limited, Chennai vs. DCIT, Chennai

The appeal of the revenue stand partly allowed in terms of our above order

ITA 1390/CHNY/2016[2008-09]Status: DisposedITAT Chennai23 Dec 2022AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am.

For Appellant: Shri B. Ramakrishnan (CA) – Ld. ARFor Respondent: Ms. Ann L.Kapthuama (CIT) –Ld. DR
Section 143(3)Section 14ASection 250(6)

…आयकर अपीलीय अिधकरण ‘डी’ "ायपीठ चे"ई म"। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI माननीय ,ी महावीर िसंह, उपा23 एवं माननीय ,ी मनोज कुमार अ8वाल ,लेखा सद; के सम3। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM. आयकरअपीलसं./ITA No.1390/Chny/2016 (िनधाDरणवषD / Assessment Year: 2008-09) M/s. Siva Industries and Holdings Ltd. DCIT (merged entity of M/s Siva Ventures Ltd.) Corporate Circle-3(2), बनाम/ New No.19, Old No.32, Chennai. Vs. Cathedral Garden Road, Nugambakkam Chennai – 600 034 "थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACS-8496-D (अपीलाथ"/Appellant) : (""थ…

M/S Ranwa Land Developers Pvt. Ltd., 4, D-Villa, Station Road, Jaipur vs. ITO, Ward-3(2), Jaipur

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 329/JPR/2022[2014-15]Status: DisposedITAT Jaipur21 Dec 2022AY 2014-15
For Appellant: Shri P.C. Parwal, CAFor Respondent: Smt. Monisha Choudhary, JCIT
Section 142(1)Section 143(1)Section 143(2)

…t expenditure u/s 36(1)(iii) is allowable if it is incurred for purpose of existing business or profession. 4. Reliance on the issue of allowability of interest expenditure u/s 36(1)(iii) is placed on the following cases:- S.A. Builders Ltd. Vs. CIT(A) & Anr. 288 ITR 1 (SC) The head note of the decision reads as under:- Business expenditure—Interest on borrowings—Providing of interest free loan to subsidiary company—High Court and other authorities should have enquired as to whether the interest-free loan was given to the sister company (which is a subsidiary of the assessee) as a measure of commercial expediency…

Xchanging Solutions Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal is partly allowed

ITA 292/BANG/2022[2017-18]Status: DisposedITAT Bangalore21 Dec 2022AY 2017-18

Bench: Shri N.V. Vasudevan & Ms. Padmavathy S

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri K. Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 143(3)

…tional Taxation-I, Kolkata reported in [2016] 71 taxmann.com 193 (Kolkata - Trib.) (SB) made it clear that the principle of commercial expediency which is applicable in the case of domestic transaction as approved in the case of SA Builders Ltd. v. CIT [2007] 288 ITR 1/158 Taxman 74 is not applicable to international transactions. Applying the same ratio, the decision of Hon’ble SC rendered in the context of unrelated party domestic transaction is not applicable to the international transaction with the AEs. Moreover, the assessee is not in the banking business. The question involved in the case of Bombay Dyeing…

Kantharajapura Ramaiah Ananthababu, Mysuru vs. Principal Commissioner of Income Tax, Bengaluru-3, Bengaluru

In the result, the appeal of the assessee is allowed

ITA 491/BANG/2022[2017-18]Status: DisposedITAT Bangalore19 Dec 2022AY 2017-18

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2017-18

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri K. Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru
Section 143Section 263

…low profits / income declared from the liquor business which is not in accordance with taw and facts. Parity of reasoning is drawn from the decision of the Hon'ble Apex Court in the case of M/s. S.A Builders Limited Vs. Commissioner of Income-Tax reported in 288 ITR 1 [SC]. 10. The learned Principal Commissioner of Income tax has passed an unsustainable order which is based purely on assumptions and presumptions. The order is arbitrary and full of surmises, without considering the relevant material and Page 4 of 12 considering irrelevant materials. Consequently, the order passed is a perverse order on the facts…

ITO 25 (3)(3), Mumbai vs. Rahul Kantilal Shah, Mumbai

In the result, the appeal filed by the revenue is dismissed

ITA 6806/MUM/2018[2013-14]Status: DisposedITAT Mumbai13 Dec 2022AY 2013-14

Bench: Shri M Balaganesh & Shri Pavan Kumar Gadaleito – 25(3)(3) Vs. Rahul Kantilal Shah Room No. 606, 6Th Floor 701, Saroj Bldg, C-10, Pratyaksh Kar Sardar Vallabhbhai Bhavan, Bkc Complex Patel Road, Opp Pawan Bandra (E), Mumbia – Hans, Vile Parle (W) 400 051. Mumbai – 400 056. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaips0543C Appellant .. Respondent Appellant By : Ms. Samruddhi Hande.Dr Respondent By : Mr. Anuj Kisnadwala.Ar Date Of Hearing 23.09.2022 Date Of Pronouncement 19.12.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Revenue Has Filed The Appeal Against The Order Passed By The Commissioner Of Income Tax (Cit(A)) - 37, Mumbai Passed U/S 143(3) & 250 U/Sec Of The Act. The Revenue Has Raised The Fallowing Grounds Of Appeal:

For Appellant: Ms. Samruddhi Hande.DRFor Respondent: Mr. Anuj Kisnadwala.AR
Section 143(3)Section 14ASection 57Section 68

…s the most important yardstick for the allowability of deduction Under Section 36(1)(iii) of Income Tax Act, 1961. 7.3 While explaining the meaning of these phrase the Hon'ble Supreme Court in the case of S. A. Builders Ltd. Vs. CIT(A), Chandigarh reported in 288 ITR 1 has used the word "commercial expediency". By using this phrase Hon'ble Supreme Court has given a new dimension and clarified the concept further. In the judgment the Supreme Court has defined commercial expediency as "an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expendi…

Zhilmil Electronics Pvt. Ltd., Faridabad vs. ITO, Ward- 2(5), Faridabad

In the result, the appeal of the assessee is allowed

ITA 6172/DEL/2019[2015-16]Status: DisposedITAT Delhi13 Dec 2022AY 2015-16

Bench: Dr. Brr Kumar & Shri Yogesh Kumar U.S.Asstt. Year: 2015-16

For Appellant: Shri Rajiv Saxena, AdvocateFor Respondent: Shri Vivek Vardhan, JCIT
Section 143(3)Section 56(2)(viib)Section 68

…ncome tax department or revenue official cannot guide a businessman in which manner risk has to be undertaken. Such an approach of the revenue has been judicially frowned by the Hon'ble Apex Court on several occasions, for instance in the case of SA Builders, 288 ITR 1 (SC) and CIT vs. Panipat Woollen and General Mills Company Ltd., 103 ITR 66 (SC). The Courts have held that Income Tax Department cannot sit in the armchair of businessman to decide what is profitable and how the business should be carried out. Commercial expediency has to be seen from the point of view of businessman. Here in this case if the inve…

M/S Kulkarni & Sahu Buildcon Pvt.Ltd., Bhilai(Cg) vs. The Dy. Commissioner of Income Tax 1(1), Bhilai(Cg)

In the result, appeal of the assessee is allowed in terms our aforesaid observations

ITA 30/BIL/2016[2012-13]Status: DisposedITAT Raipur12 Dec 2022AY 2012-13

Bench: Shri Ravish Sood & Shri G D Padmahshaliआयकर अपील सं. / Ita No.30/Rpr/2016 "नधा"रण वष" / Assessment Year :2012-13 M/S. Kulkarni & Sahu Buildcon Pvt. Ltd. B-495, Cross Street-25, Smriti Nagar, Bhilai-490020 (C.G.) Pan :Aaeck3160C .......अपीलाथ" / Appellant बनाम / V/S. The Deputy Commissioner Of Income Tax-1(1), Bhilai (C.G.) ……""यथ" / Respondent

For Appellant: Shri Nilesh Jain, CAFor Respondent: Shri Choudhary N.C Roy, Sr. DR
Section 133ASection 143(2)Section 143(3)Section 69

…godown and the same was given on rent by the assessee. Therefore once commercial expediency for giving the advance is established, no part of the interest expenditure can be disallowed in view of the decision of Hon’ble Supreme Court in case of S.A. Builders 288 ITR 1 and Hero Cycles Pvt. Ltd. vs. CIT 379 ITR 347 where it was held that the Revenue cannot justifiably claim to put itself in the armchair of the businessman or in the position of the Board of Directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. If further held that no businessman c…